BANGKOK — The Bank of Thailand held interest rates at 3.0 percent on Wednesday for the second time in 2012 to bolster the nation's fragile economic recovery from devastating floods, the central bank said.
The Monetary Policy Committee said its earlier cuts to the benchmark rate -- the most recent in January -- had aided Thailand's rebound from last year's floods, but warned risks remained to the kingdom's export-driven growth.
The economy suffered a double-digit contraction in the fourth quarter of 2011, the sharpest on record, after the worst floods in half a century pummelled industry.
Official data Tuesday showed inflation rose 2.47 percent in April from a year earlier, a significantly lower rate than in March, encouraging the interest rate hold.
"Inflationary pressure is manageable so the committee has agreed that the current interest rate is suitable for supporting economic recovery," Paiboon Kittisrikangwan, the bank's assistant governor said in statement.
"So the committee unanimously agreed to keep the policy rate at 3.0 percent."
Economists urged the Bank of Thailand to keep rates on hold for the rest of the year, with exports and manufacturing still shrinking following the floods and inflation seemingly under control.
Usara Wilaipich, senior economist for Global Research at Standard Chartered Bank said the pace of recovery had been "generally disappointing".
"Exports contracted 3.9 percent and manufacturing production 7.2 percent year-on-year," she said.
"We maintain our call for the BoT to hold rates for the rest of this year, as inflation is expected to stay well-contained in 2012."
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